Obama hails cuts in wasteful contracts

President Obama arrives for an announcement on government efficiency with SAVE Award winner Nancy Fichtner at the White House on Monday. (Reuters/Jim Young)

President Obama announced Monday that the federal government is halfway to meeting his goal for cutting wasteful government contracts.

"Business as usual in Washington just won’t do,” Obama said in remarks at the White House. “After years of irresponsibility, we are once again taking responsibility for every dollar we spend, the same way families do."

As The Eye first reported, federal agencies are almost halfway toward reaching a two-year goal set by Obama this year, with plans to save roughly $19 billion in government contracting costs during the fiscal year that began in October. The figures are in a progress report released Monday by the Office of Management and Budget.

The president directed agencies in March to cut $40 billion from contracting budgets over the next two fiscal years by trimming non-competitive contracts and ending the use of contractors for some government functions.

Government spending on contracts has more than doubled since 2002, totaling approximately $540 billion in 2008, the OMB said. The use of noncompetitive, "high risk" contracts jumped by $106 billion during the same six-year period.

"This is an inexcusable waste of money," Obama said, noting he ordered agencies in March to cut their "high risk" contracts by at least 10 percent.

Obama also announced that the White House will host a forum on modernizing government in mid-January. The meeting will address the government's lagging use of technologies that could help drive down costs and improve productivity.

Obama spoke on Monday after meeting with Nancy Fichtner, a Department of Veterans Affairs employee who won a government-wide competition that sought cost savings ideas from rank and file federal employees.

"Nancy means business," Obama said after their meeting. "She's a single working mom. She's a clerk with the V.A. She's an artist. She's an outdoors woman. And she is an avid hunter. In fact, somewhere in the western United States, there is an elk that is breathing a sigh of relief because Nancy is here instead of where she would have been, hunting with her kids."

Fichtner is a single mother who hunts with her kids and works at the VA Medical Center in Grand Junction, Colo. She submitted her idea on the last day of the SAVE Award contest and suggested that VA hospitals allow patients to take leftover medication home with them when they leave. Fichtner's idea beat more than 38,000 other submissions and will be included in Obama's fiscal 2011 budget requests.

The SAVE Award will become an annual tradition, Obama said.

"I've issued a challenge to every man and woman who works for the federal government. If you see a way that government can do its job better or do the same job for less money, I want to know about it," Obama said.

The Federal government could save even more money by allowing agencies to hire self-employed individuals instead of paying overhead and profit to companies. The UN has a good, working system for this in which such individuals are selected through the personnel system, and then given a contract. Competition is achieved through the job announcement process, just like it is for job applicants hired into the UN's civil service system.

Let's say that the government has an IT center staffed by contractors. Instead of releasing a request for proposals, under the UN's system, you would send 10 requisitions to personnel for various levels of IT staff.

The good thing about the UN system is that the persons who do the work also get the money. It doesn't get siphoned off by contractor presidents, administrators, etc., as corporate profit and overhead for people who are non-value-added to the work process.

obozo cutting spending begins with u dope.any more stimulus available? need a few $$$$ to pay utilities bill which , along with taxes and increased health insurance on a fixed retirement income have skyrocketed. guess just have to cut back on food. compared to ur agenda,clinton and carter were good for our country

obozo cutting spending begins with u dope.any more stimulus available? need a few $$$$ to pay utilities bill which , along with taxes and increased health insurance on a fixed retirement income have skyrocketed. guess just have to cut back on food. compared to ur agenda,clinton and carter were good for our country

"This is an inexcusable waste of money," Obama said. He must be referring to all of the tremendously wasteful spending he is doing with "stimulus," entitlements, travel around the globe, cap and tax, etc. 19 Billion is a drop in the bucket compared to his trillion dollar plus deficits.

I'm a new federal employee, and when I saw the announcements about the SAVE award, I was a bit skeptical to say the least. But after reading that the government received 38,000 responses, and reading some of the responses themselves, this is actually a pretty good idea. Federal employees that have worked at some of these agencies for years, and have a good idea of the agencies' day to day functions, provide the best frontline perspective for costs saving. The only thing that I question is why this program is annual --( besides the fact that the idea is tied to the budget), shouldn't the administration try to do something like this every three months or so?